Collateral rules criticised

Lawmakers and financial firms resist rules to implement last year's Dodd-Frank law that could require banks to set aside more collateral when they make certain trades in the derivatives market

By

The Wall Street Journal

July 25, 2011 3:42 pm GMT

Some lawmakers and financial firms are resisting rules being written to implement last year's Dodd-Frank law that could require banks to set aside more collateral when they make certain trades in the derivatives market.

The law requires that much of the collateral be held in cash or high-quality government securities, such as Treasury bonds. But some critics claim such a requirement could steer more money into US securities just when many investors are getting nervous about the nation's debt load.